6th November 2024

Chancellor Rachel Reeves delivered her Autumn Budget last week, the first Labour Budget in 14 years!  So what changes were announced for housing in the Autumn Budget….

Housing announcements included £5 billion government investment to deliver Labour’s housing plan, with a £500 million boost to the Affordable Homes Programme.

There will also be £25 million put towards the delivery of 3,000 energy-efficient new homes across the country, with a target of 100% of these being affordable.

Capital Gains Tax on residential property will remain unchanged.

The government has also pledged to engage with industry on plans to make the Mortgage Guarantee Scheme permanently available to support lending at 95% loan-to-value.

What’s happening with stamp duty? Stamp duty is a form of tax paid to the government when buying property or land. And the amount buyers pay varies based on the cost of the property, and whether you’re buying a home to live in, or an additional home. The stamp duty surcharge for those buying second homes, such as landlords buying properties to rent out, rose by 2% from 31 October 2024, increasing from 3%, to 5%.

Rightmove’s property expert, Tim Bannister, says: “Increasing stamp duty on additional home purchases means that, based on the average asking price for a home, a landlord could face an additional charge of more than £7,000 going forward. In the short-term, some landlords may need to pause for thought, but in the longer-term we expect it becomes another charge that landlords become accustomed to considering.”

The previous Conservative government adjusted stamp duty thresholds until March 2025, which meant that home-movers would pay lower stamp duty fees, and in many cases (mostly for first-time buyers), meant no stamp duty to pay at all. There were no announcements around an extension to the current elevated thresholds, meaning these are set to drop back at the end of March 2025.  Our Residential sales manager, Jo Woollam says: “With the rate at which no stamp duty is charged for home-movers due to fall from £250,000 to £125,000, anyone purchasing a property over this amount could face paying up to £2,500 more in stamp duty land tax. Meanwhile, the threshold rate at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000. If a first-time buyer buys a property at the average UK price of £370,759 they will pay £3,538 in stamp duty from March 2025, compared with nothing now.”

“We may now see a rush of buyers, particularly those purchasing for the first time, either bringing their plans forward or trying to get their deal done before charges go up. It currently takes a lengthy 152 days on average to complete a property transaction once a sale is agreed, which would mean agreeing a deal tomorrow to complete on time. While this is an average and many will be hoping to complete more quickly, it highlights that those who are hoping to avoid higher charges will need to act quickly”, Estate Agent Jo adds.

Earlier this year we saw a record number of former rental homes for sale as some landlords made the decision to sell their properties as a result of the rumoured tax change, along with other additional costs for landlords that have grown over the years. However, the Autumn budget has confirmed that the current rates of Capital Gains Tax on residential property will remain unchanged.

What’s happening in the housing market right now?

As Shropshire Estate Agents, we’ve seen strong levels of activity in the typically busy autumn season, and lots more people looking to get on with home moves than we saw in the more muted market of 2023. The number of sales agreed nationally is up 29% compared to the same time last year. On top of that, buyers will also find more choice of homes, with the number of homes for sale up 12%. While there’s lots of activity in the housing market, we did see lower-than-average growth in house prices last month, compared to the seasonal average. This shows that the market is still price sensitive, and sellers coming to market need to set a realistic asking price to find a buyer.

Want to check how much your home is worth? You can get an Instant Online Estimate | Roger Parry